AUDNZD - Five Year Lows

[Daytr]

We have a strong housing market & construction sector particularly in Auckland & Christchurch.
Massive infrastructure builds around roading etc as well & that is helping underpin the NZ growth story.
'Then you have farming & don't forget oil, but those impacts will take a while to filter through & obviously lower oil impacts exports but is a catalyst for the economy as a whole with cheaper fuel.
The other factor is NZ's interest rate & foreign money coming in to invest in the sectors mentioned above & cheap dairy farms.
I'm just wondering if we see a blowout in the Kiwi at some stage, i.e. it gets stronger against the AUD.
But history is telling me this is a very good level & I think we have been lulled into a bit of a false sense of security in regards what the impact of those farm prices will mean for the NZ economy in the next 12 months.

[Wolf]

http://www.stuff.co.nz/business/indu...-dollar-higher

Big dry could drive NZ dollar higher

"If we're going to get a new high I suspect it will be on Monday, Tuesday or Wednesday," Kelleher said.

Love this comment

[Daytr]

Typical economist no idea how the real world actually works!
It might get pushed higher but not for those reasons.
Higher dairy prices wont be felt for a year!
Is money going to rush in on that?
Whereas any decline in production starts hurting exports a lot quicker.
At the last bank I worked at I had to review all our economists publications just make sure that any of their assumptions had some factual basis on what actually goes on the real world of commodities.

[winner69]

What an absolute load of dribble...... Fonterra are already auctioning less product to hopefully get higher prices.
In the real world of farming economics higher prices for less production is not anymore beneficial than ave production for ave prices.
Currently dairy production is down because of the Dry and Fonterra payout is way down..... how the hell can a continuation of this push the kiwi $ higher
I am confident our overall GDP will take a hit on a lasting Dry......... and we know what that will do for the $.
Government tax take is going to take a big hit on a lasting Dry.
Story written by by a reporter taking advice from fark wits that sit behind a desk all day thinking about what they will have for lunch to much.

Snaps - There is little (almost non-existent) correlation between annual changes in the ANZ Dairy Product Price Index and annual changes in the NZD/AUD (correlation coefficient of 0.09)

Day to day / hour by hour gyrations caused by traders who get excited by any sort news is a different story ...they only want to see short term movements anyway

[Valuegrowth]

Milk prices could stay low while having volatility. Unlike those days both emerging and frontier markets are also trying to increase their milk production including multinational companies in those countries such as Nestle. What we are seeing now is adjustments of asset prices globally. We can clearly see falling prices in over valued commodities such as oil, gold, mild etc and in overvalued currencies such as AUD and NZD etc. This process could last until 2017/18. There are cycles for assets. What will be next assets to fall? Despite lower commodity prices some global consumers are not getting any benefits. Still they pay same prices for milk, transportation including prices for air tickets. Finally any bubble will end up with burst. This applies to stock, commodity, currency and property market.

http://www.farmersjournal.ie/indian-...ats-eu-174748/

Indian milk production beats EU

http://www.nzherald.co.nz/business/n...ectid=11335119

Long period of low dairy prices predicted because of global surplus

http://www.theguardian.com/business/...s-fall-further

Dairy farmers warned: milk prices have further to fall


Both NZD and AUD should fall further. One NZD or AUD could trade less than 0.50 cents of USD by 2016 or in the second half of 2015.

My ideas are not a recommendation to either buy or sell any security, commodity or currency. Please note that I do not endorse or take responsibility for material in the above hyper-linked sites. Please do your own research.

[Daytr]

Spot on Snapiti! LOL. Well I suppose we will see this week if that ASB guy is right, even by coincidence.
What's people's thoughts on the Kiwi marching higher against the Aussie?
Depend on cricket results or something more tangible? haha
Seriously NZ economy right now is a bit out of step with a lot of other economies such as Europe & Australia with a lot of growth being fueled by what I would suggest is unsustainable government policy on immigration, but also infrastructure spends.
I agree tax take is going to take a huge hit on the dairy price & drought conditions.
Key has promised a balanced budget something he has failed to deliver so far although he got close in the last year.
I would suggest that is unlikely to happen this budgetary year due to a slide in tax income so does that mean government spending is reigned in on the likes of infrastructure or do they perhaps look at some sort of tax to cool the Auckland property market?
I think if they have a budget blowout they are in political trouble as this has been Key's best weapon to date, the economy.

What an absolute load of dribble...... Fonterra are already auctioning less product to hopefully get higher prices.
In the real world of farming economics higher prices for less production is not anymore beneficial than ave production for ave prices.
Currently dairy production is down because of the Dry and Fonterra payout is way down..... how the hell can a continuation of this push the kiwi $ higher
I am confident our overall GDP will take a hit on a lasting Dry......... and we know what that will do for the $.
Government tax take is going to take a big hit on a lasting Dry.
Story written by by a reporter taking advice from fark wits that sit behind a desk all day thinking about what they will have for lunch to much.

[Daytr]

I just got hit on my bid this morning so we will see how good this ASB guy is LOL.
Got filled at a similar level about a month ago & it moved back into the 1.07s, so lets see if its a rinse & repeat!

[Xerof]

http://www.stuff.co.nz/business/mone...pass-a97-cents

Jeez, they've got to stop interviewing Tim after he's been for a long lunch.......

Good luck for your trade Daytr, you're against the trend, so be nimble

[Daytr]

Haha, well I do like someone who puts their proverbials on the line by making a call, although it does appear to be a bit to precise to be realistic and despite the logic that's behind it. I think what he's really saying to be fear is the headline dairy price number if good will send the Kiwi higher & it probably would as the fundamentals such as drought etc will take a while to filter through.

[Daytr]

I also wonder what position he may have on?
Perhaps is desperate for a win! haha